Australian Council Australian of Social Council Service of Social Service When it comes to affordability of electricity, what have we talked about too much? What have we not talked about enough? A low-income and disadvantaged household perspective Cassandra Goldie, CEO ACOSS February 2018
ENERGY BILLS SKYROCKETING Electricity prices increased 63% (real term) in decade Reasons Over-investment in networks Retail competition failing Insufficient competition in the generation and retail markets Increase in gas Investment uncertainty in generation due to continuous policy change Renewable incentives on bill (regressive) Harming the whole economy. But low-income and disadvantaged households bare the brunt. There has not been enough focus from policy makers on the broader system and solutions!
HOUSEHOLDS STRUGGLING Against a back drop where: Housing costs increasing Low wage growth Newstart hasn t increased above inflation in 20yrs Long-term unemployment has tripled since GFC Job for only 1 in 8 applicant's Australia has second highest ate of poverty amongst wealthy countries in OECD 3 million people.
LOW INCOME AND DISADVANATGED HOUSEHOLDS WORSE OFF Wages, benefits and pensions for a single adult ($ per week, adjusted for inflation) 1,600 1,566 1,400 Average wage 1,200 1,000 Min wage 800 Pension 600 695 Family payments 400 200 437 374 268 Newstart Allowance 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
LOW INCOME AND DISADVANATGED HOUSEHOLDS WORSE OFF Low-income households pay disproportionately more of their income on energy and other essential services We are seeing more Disconnections (160,000 in 2015/16) People on retail hardship programs People accessing financial support services Rationing of energy to detriment of family, health and well being, and economic participation Particularly vulnerable - Renters; Households where someone is living with a disability or health issue; Single parent households; Aboriginal & Torres Strait Islanders; Migrants and Refugees; Pensioners; Working poor; and Housing stressed.
WHAT HAVEN T WE TALKED ENOUGH ABOUT? It s more than just about energy price Energy price + Total costs of energy + Ability to pay Upward pressure on electricity price Technologies used to produce energy Market design How & pace we respond to climate change When & how much energy is consumed Vulnerability Level of Income & access to concessions Housing circumstances Choice and Control Ability to engage Total cost of securing energy needs
WHAT HAVEN T WE TALKED ENOUGH ABOUT? Associate Professor of Economics Lynne Chester wrote energy debates are framed around a conception of the consumer as a buyer, underpinned by assumptions about behaviour and energy use with shifts in electricity prices. Poverty, deprivation, and social exclusion debates are framed around the impoverished as social beings within a broader living standards and participation framework. These two disconnected debates need to intersect, and only then will effective policy measures be developed to ensure the energy consumer, as a social being, does not experience energy impoverishment.
Empowering disadvantaged households to access affordable, clean energy WHAT HAVEN T WE TALKED ENOUGH ABOUT? Need to focus on outcomes in five areas to deliver clean affordable energy for households. To date the focus has mainly been on outcome 1 - Energy Price AND increasingly outcome 2 Engaging in electricity market. Urgent need to focus on outcomes 3 - energy efficiency & productivity AND outcome 5 improve capacity to pay By ACOSS, BSL and TCI Funded by ECA Framework: Andrew Nance
WHAT ALSO HAVEN T TALKED ENOUGH ABOUT? Whether the current market based system is the best way to deliver an essential service We acknowledge there has been price gouging and policy failure under both public and private ownership But instead of tinkering around the edges do we need to be talking about a rethink?